EPA proposes limits on power plant greenhouse gas emissions

The Environmental Protection Agency proposed its first-ever limits on greenhouse-gas emissions from new power plants on Tuesday, further boosting natural gas while dealing conventional coal-fired electricity another blow.

Republicans and industry groups quickly vowed to fight a rule that they claim would raise electricity prices and endanger a cheap form of electricity in coal. Democrats and environmental activists, meanwhile, praised the rule for power plants — which EPA says are the largest individual sources of greenhouse-gas emissions in the U.S. — as a good step toward reducing the climate-warming pollution.

“Right now there are no limits to the amount of carbon pollution that future power plants will be able to put into our skies — and the health and economic threats of a changing climate continue to grow,” EPA Administrator Lisa Jackson said. “We’re putting in place a standard that relies on the use of clean, American-made technology to tackle a challenge that we can’t leave to our kids and grandkids.”

If finalized, the rule would become the latest step the Obama EPA has taken toward reducing emissions that nearly all climate scientists warn are causing average global temperatures to rise by enhancing the greenhouse effect. Already the EPA has finalized fuel-efficiency standards for heavy-duty and medium-duty trucks and buses and proposed doubling passenger vehicle mileage by model year 2025.

EPA’s proposed rule would set an emissions limit on new power plants of 1,000 pounds of carbon dioxide per megawatt-hour of power. Jackson said a wide range of fossil-fuel facilities, including modern natural-gas plants and carbon-capture coal plants, can comply. For coal power plants that don’t start out with carbon-capture technologies, companies could average their emissions over a 30-year period, Jackson said.

The rule, which must undergo public comment before it’s finalized, wouldn’t apply to power plants already operating or built over the next 12 months, Jackson told reporters by phone. The agency has “no plans” to propose rules for existing plants, Jackson said.

While a plurality of U.S. power comes from coal, the fuel’s market share has declined because of factors like low natural-gas prices, aging and inefficient plants and environmental regulations. Natural gas, which emits about half as much carbon dioxide as does coal, has boosted its market share, while wind power has boomed thanks to tax incentives and declining costs.

Jackson said the EPA rules would facilitate the power industry’s ongoing transition to lower-carbon fuels, as plants now planned or near completion are clean enough to comply. She said EPA modeling suggests carbon-capture methods, while still in the demonstration phase, “will become commercially available in the next 10 years.”

“As a result the standards would impose no additional cost on current generation while ensuring cleaner generation in the future,” Jackson said.

EPA must issue the greenhouse-gas rule for power plants under a court agreement with environmental groups and states. The agency has delayed proposing it beyond the original deadline of July 2011.

While environmentalists cheered Tuesday’s announcement, many have fought for a more sweeping climate policy. They lobbied for legislation in 2010 that would have set a declining greenhouse-gas cap and created a market for trading emissions permits, but the bill failed in Congress amid GOP opposition.

“The logical next step is to improve the aging fleet of existing coal-fired power plants, which remain the major source of industrial carbon pollution in our country,” Frances Beinecke, president of the Natural Resources Defense Council, said in a statement.

Republicans kept slamming the rule Tuesday. They complain that the EPA is seeking to greenhouse-gas emissions under authority that Congress didn’t give it, and argue the rule would doom coal power.

The 2007 Supreme Court case Massachusetts v. EPA ruled that greenhouse-gas emissions, such as carbon dioxide and methane, fell under the Clean Air Act’s definition of pollutant. In 2009 the EPA determined that the pollutants threatened public health and welfare, authorizing the agency to regulate the emissions.

Sen. James Inhofe, R-Okla., ranking member of the Senate Environment and Public Works Committee and a climate skeptic, said he plans to use a procedural tool to hold a simple-majority vote in the Senate on killing the regulation. He noted that Congress has already defeated cap-and-trade legislation.

“Now our fight is to stop them from forcing it on the American people through regulations,” Inhofe said Tuesday.

Industry groups, meanwhile, warned that the EPA was taking a risky bet on natural gas, which has experienced price volatility.

Scott Segal, executive director of the Electric Reliability Coordinating Council, an energy industry coalition, noted that new regulations are coming for hydraulic fracturing, the drilling technique used to access vast reserves of natural gas.

“Static price assumptions for gas may prove highly unreliable,” Segal said in an email.

Jackson said natural gas prices would have to rise “far in excess” of any reasonable prediction for the economics of the rule to change.

The EPA also has pushed back similar greenhouse-gas regulations for oil refineries multiple times, recently announcing it likely won’t finalize a refinery rule in 2012. Jackson told reporters Tuesday that the EPA hadn’t set a timeline for the regulation.